Practice Direction on Pre Action Conduct

A Practice Direction contains practical advice on how to interpret the Civil Procedural Rules (CPR).

In England and Wales civil litigation is governed by the Civil Procedure Rules (‘CPR’). These represent a single code of rules setting out how a claim is to be conducted by parties in civil proceedings.

The rules apply across all types of civil dispute with the aim of making the claims process quicker, simpler and less adversarial. The rules are, however, extensive and further supplemented by a number of Practice Directions and Pre-Action Protocols.

There are a number of Practice Directions relating to the individual parts of the CPR, from application and interpretation of the rules to general rules about enforcement of judgments and court orders.

When exercising its powers of case management, the court will always look to whether or not a party has complied with a Practice Direction. Any failure to comply, without good reason, can result in sanctions being imposed by the court, including costs penalties.

What is a Pre Action Protocol?

In addition to Practice Directions, there are also a number of Pre Action Protocols annexed to the Civil Procedural Rules, setting out enforceable standards for the efficient conduct of pre-action litigation.

Each Pre Action Protocol sets out the steps the court would normally expect prospective parties to take before commencing proceedings for particular types of civil claims.

This includes establishing a reasonable process and timetable for the exchange of information relevant to the dispute, as well as setting standards for the content of correspondence and the conduct of pre-action negotiations.

There are pre action protocols currently in force (as of April 2018) for the following types of civil claim:

The aim of the Pre Action Protocol is to encourage the exchange of information between parties at an early stage, to improve pre-action communication and to provide a clear framework within which the parties can explore a resolution to a claim without the need for a full court hearing.

What is the Practice Direction on pre action conduct and protocols?

The Civil Procedural Rules include a specific Practice Direction on pre action conduct and protocols. This applies to civil disputes where no other pre action protocol applies.

The guidance set out in the Practice Direction on pre action conduct is to enable parties to a prospective claim to:

• understand each other’s position • make decisions about how to proceed • try to settle the issues without proceedings • consider a form of alternative dispute resolution to assist with settlement • support the efficient management of proceedings, and • reduce the costs of resolving the dispute.

Before commencing proceedings the court will expect the parties to have exchanged sufficient information to achieve these objectives.

Sharing of information and relevant documentation will help to identify the issues in dispute so that informed decisions can be made as to whether and how to proceed. If the dispute cannot be settled without proceedings, or by way of alternative dispute resolution, it may be that some of the issues can at least be reduced and, in turn, minimise the costs of litigation.

However, the Practice Direction on pre action conduct must not be used to gain an unfair advantage over another party. Only reasonable and proportionate steps should be taken by the parties to identify, narrow and resolve the legal, factual or expert issues.

Further, the costs incurred in complying with the Practice Direction on pre action conduct should be proportionate. Where parties incur disproportionate costs in complying with the guidelines, those costs will not be recoverable as part of the costs of the proceedings.

What steps should be taken before issuing a claim?

Under the Practice Direction on pre action conduct, there are a number of practical steps that the parties should take before issuing a claim at court. These should usually include the following:

The claimant should write to the defendant with concise details of the claim. The letter should include the basis on which the claim is made, a summary of the facts, what the claimant wants from the defendant, and if money, how the amount is calculated.

The defendant should respond within a reasonable time, ie; 14 days in a straightforward case and no more than 3 months in a complex one. The reply should include confirmation as to whether the claim is accepted and, if it is not accepted, the reasons why, together with an explanation as to which facts and parts of the claim are disputed and details of any counterclaim.

The parties should disclose key documents relevant to the issues in dispute based on the matters raised in their correspondence or otherwise considered relevant.

The parties should consider if it is necessary to obtain expert evidence, particularly in low value claims, and the use of a single expert to be jointly instructed with the costs shared equally. Parties should be aware that the court must give permission before expert evidence can be relied upon and that the court may limit the fees recoverable.

The parties should consider whether negotiation or some other form of alternative dispute resolution might enable them to settle their dispute without commencing proceedings. This could include mediation, arbitration, early neutral evaluation or an Ombudsmen scheme.

The parties should stocktake their respective positions following exchange of information and, at the very least, seek to reduce the matters in dispute before the claimant issues proceedings.

What are the consequences of non-compliance?

In circumstances where a party has failed to comply with the provisions of the Practice Direction on pre action conduct, this will be taken into account in any court proceedings that follow.

The court has various powers that it can impose by way of sanction, not least it will take into account non-compliance when giving directions for the management of proceedings and when making orders for costs.

By way of example, the court may order the defaulting party to pay additional costs, or for any costs awarded in his/her favour to be reduced on account of any failure. Other sanctions may also be applied, for example, awarding a higher or lower sum of interest on any sum of money recovered by the claimant than would otherwise have been awarded.

When deciding whether to impose a sanction, the court will look at whether the parties have complied in substance with the relevant principles and requirements under the Practice Direction or Pre Action Protocol in question. It will also consider the effect any non-compliance has had on another party.

The court is not likely to be concerned with minor or technical shortcomings. However, the court may decide that there has been a failure to comply in the following circumstances:

A party has not provided sufficient information to enable the objectives of the Practice Direction on pre action conduct, or other relevant protocol, to be met.

A party has not acted within a time limit set by the Practice Direction on pre action conduct or other protocol, or within a reasonable period.

A party has unreasonably refused to use a form of alternative dispute resolution, or failed to respond at all to an invitation to do so.

If proceedings are issued to comply with any relevant statutory time limit, but before the parties have followed the procedures in the Practice Direction on pre action conduct, the parties should apply to the court for a stay of the proceedings to enable them to comply.